Samsung strike called off: How to distribute the 600 million KRW bonus? 10.5% performance-based, 10-year stock options; KOSPI surges 7%, SK Hynix jumps 11%

South Korean Minister of Employment and Labor Kim Moon-soo stepped in less than an hour before the strike was set to begin, leading Samsung Electronics and the labor union to sign a preliminary agreement on the 2026 performance bonus late on May 20. Approximately 78,000 employees in the DS division could receive up to 600 million KRW, causing the Kospi to surge over 7% at the opening of the Seoul stock market the following day. (Context: Samsung's 48,000-person strike "called off at the last minute"! The union announced the postponement of the May 21 strike, with a vote on the preliminary agreement scheduled for Saturday.) (Background: A glimpse into SK Hynix's "A World Never Seen Before": KBS reveals the secret HBM memory production line, with employees beaming with smiles.) Samsung Electronics' strike was called off early this morning (21st). The union had originally planned a 18-day full-scale strike from May 21 to June 7, involving approximately 45,000 to 50,000 employees. At the eleventh hour, the strike was suspended due to the preliminary agreement on the 2026 performance bonus, prompting the South Korean stock market to respond with a 7% surge in the Kospi at the opening. The personal mediation by South Korean Minister of Employment and Labor Kim Moon-soo was the key to this last-minute resolution. According to Yonhap News Agency, labor and management signed the "2026 Performance Bonus Preliminary Agreement" late on May 20, less than an hour before the National Samsung Electronics Union (NSEU) was scheduled to begin its strike. The union's original demands were quite firm: abolish the current 50% cap on performance bonuses and require a bonus pool based on 15% of annual operating profit. Samsung initially refused to budge, leading to a standoff that lasted for several days. The final agreement settled on a 10.5% allocation. While the union made a substantial concession, they secured a new institutional framework called the "Special Management Performance Bonus," which provides a clearer basis for profit-sharing for employees in the DS (Device Solutions) division when performance is strong. Although the agreement has been signed, it still requires approval from union members to take effect. As scheduled, NSEU members will vote on the interim wage agreement from 2:00 PM on May 22 to 10:00 AM on May 27. While it is widely expected that the agreement will pass, the risk of a strike remains if the vote results in a rejection. The core structure of this agreement is the establishment of a "Special Management Performance Bonus" in the DS division, with an allocation ratio of 10.5% of the division's performance. The distribution logic is two-tiered: 40% is allocated to all DS employees, and the remaining 60% is distributed based on the individual performance of each business unit; if a business unit records a loss for the year, the distribution is suspended. Samsung's projected operating profit for 2026 is 300 trillion KRW. Based on this, the approximately 28,000 employees in the DS division's memory chip business group could theoretically receive up to 600 million KRW (approximately 14 million TWD) each. The entire DS division has about 78,000 employees, with approximately 30,000 administrative staff also included in the framework, though their distribution ratios and conditions differ. It is worth noting, however, that this bonus is not paid in a lump sum of cash but is distributed in the form of stock over approximately 10 years. The design logic is to retain core talent and align employee interests with the company's long-term stock price. However, for employees in urgent need of cash, this arrangement remains controversial and could be a point of pressure for the union in the future. Following the news, the reaction in the Seoul stock market was almost instantaneous. The Kospi opened up 277.41 points (+3.84%) on May 21 and subsequently surged past 7%, marking the largest single-day gain in recent times. Samsung Electronics' stock price also rose by nearly 7%, as the market finally priced out the uncertainty of the strike that had been hanging over it for days. SK Hynix rose by over 11%. With the crisis now likely averted, the market is repricing the stability of the entire memory supply chain, and SK Hynix is also benefiting. The reason this labor negotiation made foreign investors so nervous was the alarming potential for damage. During the strike, JPMorgan estimated that if Samsung employees were to stop